South Africa To Establish Illegal Online Gambling Taskforce

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Thursday, July 23rd, 2015 | Written by Shane Larson

According to South Africa’s National Gambling Act of 2008 only those operators granted an online gambling license by the Department for Trade and Industry (DTI) are permitted to offer their products in the country. That’s all fair and good, but the DTI´s Chief Director of Policy and Legislation, MacDonald Netshitenzhe (photo), firmly believes gambling is immoral and has thus far refused to issue any more online gambling licenses outside of a few already licensed sports books.

Even the country’s land-based casinos have been shut out of consideration, although they are hoping the situation may be corrected following the legal challenge they have launched against the National Gambling Act. In the meantime, the situation is likely to deteriorate further for South African online gamblers after National Gambling Senior Manager Estelle Jonkheid has said a task force would now be set up to tackle the problems of illegal gambling services. Elaborating further, Jonkheid explains:

“The establishment of a multi-disciplinary task team is to consider strategies, interventions and actions against more than 2000 illegal operators and sites across all provinces in South Africa.”

State of iGaming in South Africa

Previously, Mr Netshitenzhe’s department produced a report which estimated a regulated online gambling industry could generate as much as R110 million ($8.9m) in annual tax revenues for the country of 53 million people. However, he also believes the negative social consequences of gambling far exceed any potential benefits, and so rather than regulating the industry and using part of the revenues to fund responsible gambling programs, he has instead decided to clamp down on the industry as a whole.

“There are number of challenges that make it impossible to control and combat illegal gambling in the country. One major challenge is that South Africa has no control over borderless activities of other countries. Our main task as policy makers is to come up with strategies that will make it easy for all stakeholders involved to fight these challenges.”

Task Force

The task force announced by Estelle Jonkheid will be a multi-disciplinary body comprised of law enforcement agencies, gambling regulators, and existing license holders who will combine forces to fight the 2,000 or more unlicensed sites currently operating in South Africa. Another interest group concerned about the estimated 250,000 South Africans playing on illegal sites is none other than the Casino Association, although not so much out of any altruistic concerns about the players themselves, but more to do with them blaming unlicensed gambling sites for a 5% drop in land based casino revenues over the past few years.

Not All In Favor

The problem of online gambling was addressed at a seminar held in Pretoria and hosted by both the Department of Trade and Industry and the National Gambling Board. Attending the important meeting was a wide range of interested parties from regulators and policy-makers, to cyber experts, lawyers, and bankers, all there to basically review the country’s restrictions on online gambling, to consider the social ills of gambling, and discuss the strategies which could effectively be used to enforce its prohibition.

Nevertheless, not all parties were in favor of continuing the official policy. Snail Attorneys lawyer from Pretoria, Sizwe Snail ka Mtuze, for instance, pointed out that it was contradictory to permit sports betting while banning other types of online gambling games, a point of view shared by Chairwoman on the Government´s Committee on Trade and Industry, Louise Fubbs, who also suggested that an internet gambling expansion should take place with revenues subsequently used to fund the country’s new task force.

In addition, Chief Executive Officer of Casino Association of Southern Africa , Themba Ngobese, stated that illegal gambling should be legalized as under the current situation it is the regulated gambling industry which is suffering from eroded revenues. This also raises an important question over the state of a South African land-based casino industry currently dominated by aging clientele. Advocates of regulation have suggested that casinos should embrace the internet and new technologies in order to increase revenues, whilst also inadvertently attracting a younger audience base to its venues.